Europe Earnings: Direct Line, Royal Bank of Scotland, F&C

4:25 PM Frankfurt – Direct Line revenue dropped 5% but profit surged 55%. Meggitt said revenues in the third quarter rose 2%. Royal Bank of Scotland revenue slid 1% and net loss narrowed and aims to run down between 55% and 70% of the bad assets over the next two years.

In London trading, FTSE 100 index gained 0.2% or 15.82 to 6,747 and in Frankfurt the DAX index rose 0.02% or 1.97 to 9,036.

In Paris, CAC 40 index slid 0.03% or 1.40 to 4,298.

Direct Line Insurance Group Plc increased 1.2% to 227.60 after the U.K-based retail and general insurer reported gross written premium in the third-quarter ending in September dropped 4.8% to £977.8 million from £1.03 billion a year ago.

Net profit for the quarter surged 54.7% to £91.3 million compared to £59 million and diluted earnings per share jumped to 6.1 pence from 3.9 pence a year earlier.

The insurer added operating profit in the quarter rose to £131.2 million compared to £123.7 million in the same period of a year ago.

DS Smith Plc slid 0.1% to 302.20 pence after the paper packaging in its interim statement said overall group trading is in-line with expectations and good performances across the businesses.

F&C Asset Management Plc slipped 1.9% to 99.50 pence after the asset management company said group assets under management as on September 30 dropped to £90.1 billion from £92.3 billion in June 30 and retail net inflows surged to £162 million compared with outflows of £79 million in the same period in 2012.

Meggitt Plc plunged 10.6% to 512 pence after the U.K-based aerospace and defense components maker said in interim report that civil aftermarket revenues in the third-quarter rose 2% and military revenues remained flat despite U.S. sequestration from a year ago period.

The Royal Bank of Scotland Group Plc declined 6.1% to 345.30 pence after the U.K-based financial services provider reported net interest income in the third-quarter ending in September slid 1% to £2.78 billion from £2.81 billion a year ago.

Net loss in the quarter narrowed to £828 million compared to £1.41 billion and diluted loss per share slipped to 7.4 pence from 12.7 pence a year earlier.

The measures will include the creation of an internal “bad bank” to manage the run-down of high risk assets projected to be £38 billion by the end of 2013 and the bank set a goal to remove 55% to 70% of these assets over the next two years.

The bank said it is working with UK Treasury and advisers and identified a pool of £38 billion of bad assets. These assets consume 20% of bank’s capital and are made up predominantly of the most high risk assets at RBS.

The bank refrained to support small businesses in a way that meets its own targets, the independent review commissioned by the bank concluded.